Shahzad wrote:

- quote -

As an NRA, you would only be subject to US taxes on US
source income. As an RA, either by passing the substantial
presence test or by becoming a lawful permanent resident,
you are subject to US tax on your worldwide income. If you
become an RA in the middle of a year you would be a
dual-status alien for that year unless you want to make an
election to be treated as an RA for the whole year. In fact,
as you are married to a US citizen, you both may make an
election at the present time to be treated as an RA. This
would allow the filing of a joint return and it would also
make your combined worldwide income subject to US tax. I
will assume that your wife has been filing her US tax
returns as married-separate or has had no requirement to
file.

I'm not sure what you mean by asset transfer. If you have
UK bank accounts or brokerage accounts throwing off interest
and dividends and/or capital gains or losses, the income
becomes subject to US tax once you become an RA. It
wouldn't matter where you reside or where the assets are
invested. If you own rental property in the UK, you would
have to report your income and expense on a US return. This
holds true for other categories of income as well. You would
be allowed a foreign tax credit by category of income if you
are also taxed by the UK on the same income.

See IRS Pub 519 US Tax Guide for Aliens. It explains all
the above.

--
Alan
http://taxtopics.net

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I was hoping for some advice.
I would currently be regarded as a non-resident alien but am
moving to the North East with my wife (U.S. Citizen) in the
summer of 2005.

In this regard, I will apply for a green card later this
year.

My question is regarding asset transfer. My current plan of
action is to transfer assets (non US source) into the US
whilst still a NRA thus avoiding US tax.

My questions were:

1. what is the latest I can transfer this money 'tax-free'
considering that
1. I will pass the substantial presence test in 2005,
2. I will enter the US on a green card from June 2005.
3. Is any specific evidence, aside from bills of sale,
wage slips etc, is required to prove non-US source
income.
4. I would only be taxed on interest gained when money
is in a US bank account. Is that correct?
5. Any other advice you think pertinent to my particular
case. I will of course provide more information if
required.

Please forgive my ignorance in this matter. UK tax law is
somewhat simpler and I believe tax law relating to NRA/ RA /
dual-status filing is especially complex.

Thank you in advice for your help.

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